Australia has announced a joint emission trading scheme with the European Union, in a move to put a lid on the carbon emissions of one of the world’s top polluters.

The expansion of the EU’s flagship emissions policy will be partially implemented by 2015 and fully comprise Australia by 2018, AFP reports. Australia’s “carbon tax” charges buyers Aus$23 (US$23.81) per tonne. From July 1, 2015 the price will be leveled with EU carbon permits. As part of the agreement, Australia will scrap the floor price of Aus$15 per tonne for the first three years. By 2018, there would be mutual recognition of permits from both countries.

Prime Minister  Julia Gillard pledged to reduce country’s emissions – the country is largely powered by coal – by 5% by the end of this decade by imposing carbon taxes. Climate and energy minister Greg Combet told Financial Times that the agreement “reaffirms that carbon markets are the prime vehicle for tackling climate change and the most efficient means of achieving emissions reductions”.

China, which is high on the list of the EU’s hoped for future collaborators on carbon limitations, criticized Brussels’ carbon trading scheme for requiring data on carbon emissions of international airlines. Chinese airlines were banned from flying into the EU.